Question
General Knowledge Question on Economics
Devaluation means
A
Rise in the general level of prices
B
Decrease in the value of money in terms of foreign currency
C
Decrease in the purchasing power of money
D
Quantity of money is exceeding the amount of goods
Answer
Decrease in the value of money in terms of foreign currency
Explanation
Solution
Devaluation refers to the deliberate downward adjustment of a country's currency value relative to other currencies or a standard, typically within a fixed exchange rate system. It is a monetary policy tool used by governments to enhance the competitiveness of their exports and manage trade imbalances.
The correct option is (B): Decrease in the value of money in terms of foreign currency